The terms Marketplace and Platform are often used interchangeably in the context of business models involving a middleman.

While they share many similarities, including the presence of take rates and network effects, they sit on unique points along the middleman spectrum.

It’s always dangerous when you attempt to define something that comes in many flavors, but hold my beer:

  • Marketplace Business: Middlemen who actively facilitate liquidity on two sides, aid in demand generation, and handle payment.

  • Platform Business: Middlemen who offer tools for creation, aid in discovery, and provide a centralized location for supply to live.

What we’ll cover today includes a breakdown of how platforms make money, and how they fundamentally differ from marketplace models.

Here’s what we’ll tackle:

  • Subscriptions vs throughput

  • Advertising and eyeballs

  • Tooling and infrastructure

  • Retention vs acquisition

  • Payment

This one is for the true business model dorks, so tie your shoelaces tightly and don’t chew gum.

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